The Securities and Exchange Commission has agreed to support the “convergence” of U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) with International Financial Reporting Standards (“IFRS”). As part of that effort the International Accounting Standards Board (“IASB”) has been working for a number of years toward harmonization of the two sets of rules. Once adopted, it could lead to the incorporation of IFRS into the financial reporting system for U.S. public companies, and ultimately potentially all companies who use GAAP accounting.
One of the issues that IASB has been working on relates to lease accounting. The “aim of the [IASB] project is to develop a new single approach to lease accounting that would ensure that all assets and liabilities arising under lease contracts are recognized (sic) in the statement of financial position (balance sheet).” The following links provide some background on the project to date: